WASHINGTON (Reuters) — A powerful business
group's decision to use its legal firepower to back a bottling company
in a dispute with unionized workers turned a routine labor tussle in
Washington state into a high-stakes Supreme Court case that could limit
the ability of U.S. presidents to make appointments to critical jobs.

The case began as a complaint in December 2010 by the Local 760
accusing Noel Canning Corp's owner, Rodger Noel, of reneging on a
verbal agreement concerning a new collective bargaining agreement.

But after the U.S. National Labor Relations Board (NLRB) sided with
the workers, the U.S. Chamber of Commerce intervened on behalf of
the company and elevated the importance of the case by putting the
focus on whether President Barack Obama had exceeded his authority
in appointing members of the board.

The high court is set to hear longer than usual 90-minute oral
argument in the case on Monday on the constitutional issue of a
president's capacity to fill senior government posts without the
usual Senate confirmation at a time when the 100-member body is in a
recess.

Presidents of both parties have made many such "recess appointments"
to install officials who otherwise would have had a hard time
winning Senate confirmation.

The chamber calls itself the world's largest business organization,
representing more than 3 million U.S. businesses.

It has a reputation as a formidable legal advocate for business
interests. It often participates in challenges to government
regulations on behalf of all its members and regularly files
friend-of-the-court briefs in the U.S. Supreme Court and,
increasingly, in other courts.

In the Supreme Court's 2012-2013 term, the chamber won a favorable
outcome in 14 of the 18 cases in which it filed friend-of-the-court
briefs. The Noel Canning case marks the first time the chamber has
directly represented a member before the high court's justices.

With the help of the chamber's lawyers, Noel Canning won an
unexpected victory in the U.S. Court of Appeals for the District of
Columbia Circuit by convincing the judges that the appointments
Obama made to the board were unconstitutional.

If the high court were to uphold the appeals court ruling, it would
limit future presidents for years to come. The Supreme Court is
expected to decide the case by the end of June.

Obama used his "recess appointment" power to name three members to
the five-member NLRB in January 2012.

The chamber's lawyers, some with executive branch experience in the
administration of Republican George W. Bush, said Obama abused his
authority because the Senate was technically in session at the time
the appointments were made. Obama announced the appointments during
a period in which no Senate business was being conducted but a
single senator was present to conduct a so-called "pro forma"
session once every three days. Whether or not that constituted a
recess is one of the main issues in the Supreme Court case.

AN EXPANSIVE RULING

In January 2013, the appeals court issued its expansive ruling
agreeing with Noel Canning Corp. The court threw out the adverse
labor board decision on the grounds that three of its members had
been invalidly appointed by Obama.

Hobbling presidential power was not Noel Canning's stated aim when
it contested the 2012 NLRB decision. It merely wanted the board's
decision thrown out, according to court filings. Of the three board
members who presided over the case, two — Sharon Block and Terence
Block — were recess appointments.

Initially, Noel Canning's sole lawyer was Gary Lofland, a labor law
expert based in Yakima, Washington, where the bottling company is
based. He represented the company before the NLRB and filed the
initial two-page petition for review in the appeals court in
February 2012. Following standard practice, Lofland did not outline
his legal arguments in the petition.

In an interview, Lofland said he was aware of the recess appointment
issue, which was widely discussed in labor law circles after Obama
had made his appointments the prior month.

"Because of the timing of the case, the recess appointments came up
as one of the issues on my mind," Lofland said.

The chamber's lawyers were also closely following the issue. The
business lobby has been a long-term critic of the NLRB and was eager
to do what it could to prevent the Obama administration from having
a free rein over appointments.

"We were concerned about the effect the recess appointments would
have on the board and on its operations," said Rachel Brand, who
co-heads the chamber's litigation arm. "That certainty is what we
were interested in and what pushed our involvement in the case."

The Noel Canning case came to the attention of Brand and Noel
Francisco, a lawyer at the Jones Day law firm who is the chamber's
outside counsel in the case, because it was one of the first cases
decided by an NLRB panel that included the newly appointed members.

The chamber lawyers approached Lofland and asked if he was amenable
to the chamber intervening, something it and other trade groups
often do in cases with broad implications for members. Lofland said
he urged his client to cooperate.

"I thought that would be helpful to our position," he said. "I
believe the U.S. Chamber of Commerce had a great deal of credibility
in the D.C. area."

If Noel Canning had not agreed to cooperate, the chamber would
likely have participated in another NLRB appeal and made the recess
appointment argument in that case.

"This wasn't some novel concept that Noel Canning brilliantly
thought up on their own," Brand said. "Everyone knew this was going
to be an argument to make."

All of the lawyers involved declined to comment on whether the
chamber is now bankrolling the entire case.

Brand and Francisco served in the White House and Justice Department
under Bush and had experience on the legal issues surrounding
presidential appointments.

In court filings, U.S. Solicitor General Donald Verrilli,
representing the NLRB, urged the high court to throw out the appeals
court ruling in its entirety.

"The court of appeals' decision would dramatically curtail the scope
of the president's authority under the recess appointments clause,"
he wrote in one filing.

The Obama administration has also prepared a list of recess
appointments dating back to 1867 to emphasize the historical nature
of the practice.

The NLRB appointments were legitimate because they came "in the
midst of an extended period during which the Senate was bound to
conduct no business," James Coppess, a lawyer for the Teamsters — a
party in the case, said in a court filing.

The Supreme Court has various ways it could decide the case in Noel
Canning's favor, but even a narrow ruling against the government
could be bad news for Obama in the last two years of his term.
Currently the Senate is controlled by the Democrats, but Republicans
could win control in the November elections, giving them more sway
over when to declare recesses.

"That certainly would weaken the president's hand," said Sheldon
Goldman, a political scientist at the University of Massachusetts
Amherst.

At a minimum, a ruling backing Noel Canning would cause more than a
100 NLRB decisions made by the recess-appointed members to be thrown
out. The Senate confirmed new appointees last year so the NLRB
operations now would not be affected.

Emphasizing the political aspect of the case, the court is allowing
a lawyer for Senator Mitch McConnell, the Senate Republican leader,
to take part in Monday's oral argument.

The chamber's Brand said the group had no hidden agenda to try to
curtail presidential power in general.

"What good would that do?," Brand said. "That's the kind of thing
that could hurt you as much as it could help you."

Doug Kendall, head of the Constitutional Accountability Center, a
left-leaning legal group, said the chamber will have to learn to
live with whatever the Supreme Court rules.

"This case will decide the structure of the recess appointments
clause from here on in," Kendall said. "Your position had better be
one you are willing to live with regardless of who is president."